Employees with poor personal finance habits can affect a company’s profitability. Money troubles at home can lead to lower productivity at work, health problems and excessive turnover. A company is more likely to make hundreds of thousands of dollars more a year with employees that are literate in finances. The weak U.S. economy has taken a toll on employee benefits like health insurance and matching retirement plans. Companies can help themselves quite a bit by educating employees in finance.
Financial security through employee education
A company does more than just give their employees a check when trying to get financial security. The Durango Herald reports that Employees with severe financial difficulties can waste as many as 20 work hours a month worrying about their finances. The newspaper cites a survey of American workers by creditcards.com that found 57 percent do not budget and 40 percent spend 110 percent of their household income. There are also more issues in relationships when you will find money problems. The reason why 50 percent of employees had been divorced was of because financial security issues.
Getting financial literacy to help get the bottom line
Promoting employee financial education is the mission of the Personal Finance Employee Education Foundation. Thousands are added to a bottom line with financial literacy programs, reports the PFEEF. Financial education for a company’s employees with help with company loyalty, productivity also as morale. Higher financial literacy can also reduce absenteeism, turnover and workplace distractions also as operational risk across a company. PFEEF has an ROI calculator online with an investment model that helps companies see how it really will help their company. 3 to one is how employee financial literacy generally works out.
Getting employee financial education
Financial literacy is a requirement of Weyerhaeuser which is a timber company that is based in Washington state. Business Week reports that Weyerhaeuser is acknowledged as one of America’s leaders in providing financial education to nearly 14,000 employees. Employees of the company were offered 40 retirement, benefits and wellness programs in just the last year of employment. Employees who attended Weyerhaeuser’s financial literacy seminars said that they were better informed about their retirement programs, 99 percent thought that they could now make better retirement choices, and 88 percent said they would change some of their retirement choices. Most people who participated really liked the program and loved the company for offering them.
Durango Herald
durangoherald.com/sections/News/Columnists/Money_Savvy/2010/08/04/Workers_debt_can_be_companys_problem/
ROI
personalfinancefoundation.org/roi/roi-model.html
Business Week
businessweek.com/investor/content/jul2009/pi20090722_246198.htm
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